If you were puzzled by the apparent contradiction between Grand Slam Track’s stated startup funding and the mounting reports of unpaid debts during the early summer, you weren’t alone.
Grand Slam Track, led by the renowned sprinter Michael Johnson, claimed last year to have secured $30 million in funding, with a significant portion earmarked for prize money for a notable lineup of athletes. However, this year saw GST scaling down one event and canceling its season finale while being in debt to athletes, vendors, and even the city of Miramar, Fla., which hosted a Grand Slam event in May.
It’s baffling how an organization with such substantial funding could have such a long list of creditors. Before pondering whether the league can bounce back for another season, the question arises: Where did all that money go?
Insights from a recent article by The Athletic shed light on the situation. The piece revealed that GST never actually possessed the full $30 million as claimed. The amount included a $19 million commitment from Eldridge, an asset management firm, contingent on their satisfaction with GST’s inaugural event in Kingston, Jamaica. Disappointing attendance at the meet led Eldridge to withdraw their pledge.
Most of the funds discussed by GST officials never materialized in their bank account. The report disclosed that GST operated based on a term sheet rather than a concrete contract for the $19 million, making it legally less binding. This revelation helps explain the abrupt end to GST’s season and the outstanding payments owed to athletes and venues.
The league’s decision to proceed with major events despite a significant portion of their projected budget falling through raises questions. Perhaps downsizing earlier or adjusting payouts could have mitigated the financial crisis. Moving forward, athletes in such leagues will require better transparency and support to safeguard their interests.
The uncertainty surrounding GST’s future leaves athletes waiting for their earnings, highlighting the need for more reliable financial frameworks in sports startups. Building on lessons learned, ensuring financial stability will be crucial for the success of any similar ventures in the future.